When The IRS Comes Calling

If the IRS selects your business to be audited, the best
strategy is to cooperate-as quickly and efficiently as
possible. Here are some other important steps to follow:

Hire a stand-in. Tax experts say it's best if you
don't try to represent yourself. You can authorize an attorney,
CPA or enrolled agent to represent you at the examination. Keep in
mind that whomever you designate will need power of attorney to
represent you.

Give yourself enough time to prepare. The IRS may try to
pressure you into an early audit date, or an agent may even appear
at your home or office and try to start the examination
immediately. Don't let that happen. Tell them you need time to
see your accountant and prepare. Set a date that gives you the time
you need. That way, your accountant or attorney will have
sufficient time to review your return and make sure you have the
necessary receipts.

Don't volunteer information. If you decide to go it
alone, answer only the questions asked. Provide only records that
directly relate to the items questioned in your IRS notice to avoid
opening yourself up to other areas of investigation.

Give them their space. If your business is selected for
a field audit, be sure to give the IRS agent a work area that's
set apart from employees. Select a "point person" in your
business to deal with the auditor. This person should provide the
necessary records, make copies and be a general contact for the
auditor.